The worldwide market for “wireless handsets” totaled $110 billion in 2005, and will grow 23 percent to $136 billion this year, In-Stat reported on May 17. Additionally, although decreasing growth rates are forecast over the next five years, the research firm expects the market to exceed $250 billion by 2011.

Mobile phone shipments are projected to reach 935 million units this year, a number that should “more than double” by 2011, at which time annual smartphone shipments will account for more than 480 million units, In-Stat added.

In-Stat cautioned, however, that its growth projections are not “preordained.” Manufacturers must continue adding features that consumers value and that the rest of the industry can support, it said, adding that “The greatest challenge is to just add the features different customers want without adding unneeded cost or complexity from unneeded or unwanted features.”

The goal for handset manufacturers, In-Stat said, is “to make customers forget they ever tolerated a phone without the new innovations.” This is already happening, it noted, with “very few U.S. users, less than 5 percent,” not having used “at least one of the technological innovations introduced over” the past several years. According to In-Stat's research, users are open to new features such as location-based services and Bluetooth connectivity, but relatively few have any interest in multimedia services. Interestingly, camera phone use appears to be in decline.

“Big trends over the next five years include adoption of wireless phones as a mobile wallet that and more users will carry multiple devices,” In-Stat analyst Bill Hughes said. “The primary changes in phones over the next five years are that they will become more capable, incorporate beefier security, and be more targeted as organizations have greater involvement in the wireless service decisions of their employees. Perhaps more importantly, they will help us be safer.”

More information on In-Stat's report, “The Big Trends for Cell Phones, 2006-2011,” is available here.